Drugslist Marketplace: Now Offering Multisig Escrow
Posted by: DeepDotWeb
January 19, 2014
One of the newest marketplaces – called Drugslist – seems to be headed in the right direction, released yesterday a list of improvements to the website, and started offering a multisig escrow, we decided to publish that since we fully support marketplaces offering Multisig / P2P escrow rather than regular onsite escrow and by that – lowering the chances of marketplace owners scams and also protecting the vendors & buyers fund by enabling to finalize any transactions even if the marketplace itself goes down. At these times we believe that the only markets that should be used are those markets that are offering those kinds of escrows (including off sites escrows).
The Drugslist url is: http://drugslisvdknitqd.onion/
The Original Post on Reddit can be found here: http://www.reddit.com/r/drugslist/comments/1vkaxs/multisig_escrow_explained/
Full Quote of the release notes:
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We’ve been busy at drugslist trying to optimize the following problem:
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The Buyer wants to buy product P from Vendor for X BTC at the Marketplace
with the following conditions:
a) Buyer does not want to be ripped off
b) Vendor does not want to be ripped off
c) Marketplace wants receives a fair commission for brokering a successful
transaction between Buyer and Vendor
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Most escrow systems work like this:
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1. Buyers transfer money into the marketplace and makes a purchase from a
vendor.
2. The vendor sends the product to the buyer on the premise that the
marketplace is holding the buyer’s money in escrow.
3. After the buyer receives a package and he marks the transaction as
finalized. This action releases the money in escrow to the vendor.
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How the old way broke down:
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– As many people have seen first-hand, this type of escrow system has a
single point of failure: the marketplace. If a marketplace goes offline,
all transactions are lost and honest buyers and vendors lose money.
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drugslist now uses its own multi-sig escrow process:
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1. The buyer transfers money into a multi-signature bitcoin account which
has possible 3 signers: the buyer, vendor and drugslist — and a fixed
pay-out structure (95% to the vendor and 5% to drugslist). Two of the
three parties must be in agreement for the escrow funds to be released.
2. The vendor sends the product to the buyer — and this marks the 1st of
2 signers needed for the escrow funds release.
3. After the buyer receives the package, he logs into drugslist and marks
the transaction as finalized. This 2nd signing triggers the funds release
to the vendor.
—> 4. However, unlike other marketplaces, a buyer can trigger the release
of escrow funds even if drugslist goes offline. This is possible because
at the time of purchase, the buyer is given raw access to the underlying,
bitcoin-based voting mechanism that triggers his transaction signing.
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understanding drugslist’s multi-sig escrow
==========================================
Our multi-sig escrow system is designed to make sure buyers and vendors
don’t get screwed over if the marketplace going offline. That’s really it.
In normal operation, drugslist works like the marketplaces you’ve loved.
drugslist acts as the arbitrator and deciding party in dispute resolution
between buyers and vendors.
Multi-sig escrow is cool technology, but drugslist customer service is
just as important.
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the game theory perspective behind druglist’s escrow
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Suppose a marketplace going offline without notice. The following outcomes
are possible:
1) buyer has unwithdrawn money in marketplace account
2) vendor has unwithdrawn money in marketplace account
3) buyer recently ordered a product from a vendor and product was
delivered before buyer could log into marketplace
4) buyer recently ordered a product from a vendor and product is en route
5) buyer recently ordered a product from a vendor and product has not be
shipped
6) buyer has an unsettled dispute with a vendor
7) vendor has an unsettled dispute with a buyer
Our multi-sig solves issues #1 and #2, because with drugslist, buyers and
vendors don’t have to keep money within the site. Buyers deposit only what
they need to make the purchase. Vendors automatically receive released
escrow funds to an address they provide.
For issues #3-5, the buyer already paid for a product that was just
delivered, will be delivered or has not shipped yet. In all these
scenarios, the buyer cannot “un-send” or return his money from the escrow
account. If the marketplace is down, the only action a buyer can do is
release the funds to the vendor and cannot recover the money for himself.
For the latter two scenarios, the buyer has a self-vested interest to
release escrow funds early because he may not know if the product has been
shipped and as stated, his money is unrecoverable for himself.
For issue #3, the buyer has received his product, but the vendor hasn’t
received his money. The buyer cannot recover the funds for himself, but he
can release the escrow funds to the vendor. While the buyer could be lazy
and not do it, we believe that many people would do this minor altruistic
action because it doesn’t require any cost to the buyer.
For issue #6-7, speedy dispute resolution is handled by customer service —
and drugslist’s customer service is quick and responsive.
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TL;DR Summary
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In summary, drugslist has some cool technology and operational structure:
– Profit sharing for top vendors and buyers
– 1% lifetime commission on sales made from referrals
– Integrated forum, mail and marketplace with one login at
http://drugslisvdknitqd.onion
– Traditional and multi-signature escrow
– Automatic withdrawal of funds for vendors
– Client-side PGP encryption/decryption that can be freely downloaded and
doesn’t require an internet connection.
But without fantastic customer service, a marketplace cannot succeed. We
are religiously obsessive about providing fast customer service. If you
file a support ticket, or send a message on our forum, or email us, you
will get a fast response back. Every time.
-drugslist
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Find More information and marketplaces at our list of hidden marketplaces.
Updated: 2014-01-19